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The 21st Century Cures Act will Lead to Huge Spending Growth

The House is getting set to pass the 21st Century Cures Act (H.R. 6). The bill has good intentions. It is trying to do great things by reforming the patent process to streamline the research and production of drugs - getting them to patients faster, which will save lives. Unfortunately, the bill also creates a new spending program with some dubious offsets that make the overall bill difficult for conservatives to support.

While streamlining FDA regulations is a great thing, throwing more federal money at research is not. The bill seeks to move $8.75 billion over five years towards funding research at the National Institutes of Health (NIH). Aside from the question of whether the federal government ought to be responsible for funding medical research in the first place, the spending is designated as mandatory spending. Mandatory spending doesn’t have to be appropriated each year by Congress – it just goes out the door on autopilot. And although the new “Cures Innovation Fund” that is created to spend the money is supposed to be temporary (5 years), “temporary” federal programs are rarely allowed to expire.

The Congressional Budget Office estimates that between 2016 and 2025 the 21st Century Cures Act would cost $106 billion to implement. The bill pays for this by selling 8 million barrels of oil from the Strategic Oil Reserve every year. The Strategic Oil Reserve is not a piggy bank for Congress to smash when they need some extra funding. Although there are arguments for drawing down the reserve, the revenues from selling it should go towards deficit reduction, not even more government spending.

The rest of the spending offsets are found by making tweaks to in Medicare and Medicaid that are supposed to save money over time. But the savings happen over a longer period of time, while the spending happens now. This has become one of Congress’ favorite tactics – “I’ll gladly pay you Tuesday for a spending hike today.”

The intentions of this legislation are good. The Food and Drug Administration is a massive bureaucratic agency whose drug approval process needs reform in order for patients to get faster access to life-saving treatments. But although the 21st Century Cures Act is making some worthwhile reforms to this process, the method by which it is funded and the further spending attached to it are too underhanded for the bill to be worthwhile.